Audit 408145

Finding Number: 2025-002 Repeat Finding: No Type of Finding: Material Weakness in Internal Control Over Financial Reporting Description: Account Reconcilations Major Program: Aging Cluster Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: During our review of cash accounts and related reconciliations, we noted that certain year-end reconciliations were inaccurate or had not been reviewed. These conditions resulted in uncorrected misstatements, as summarized in the attached schedule. Criteria: Management is responsible for establishing and maintaining effective internal control over financial reporting to provide reasonable assurance that financial information is accurate, complete, and available on a timely basis. Effective internal controls include timely and accurate reconciliation of cash and other key balance sheet accounts, together with documented review and approval by an individual separate from the preparer. Cause: The Agency’s month-end and year-end close procedures did not consistently require reconciliations for cash and other key balance sheet accounts to be prepared accurately, completed timely, and reviewed by a separate individual. In addition, evidence of review, including the date of review and follow-up on reconciling items or unusual balances, was not consistently documented. Effect: As a result, errors in cash and related balance sheet accounts were not prevented or detected and corrected on a timely basis, resulting in uncorrected misstatements. Inaccurate or unreviewed reconciliations increase the risk that financial information provided to management and those charged with governance may be incomplete, inaccurate, or not available timely for decision-making and financial reporting purposes. Recommendation: We recommend that the Agency strengthen its month-end and year-end close procedures by requiring a designated individual to prepare reconciliations for cash and other key balance sheet accounts and requiring a separate individual to review and approve those reconciliations. Evidence of review should be documented, including the date of review and any follow-up performed on reconciling items or unusual balances. View of Responsible Officials: Management agrees with the finding and has developed a written corrective action plan.

Finding Number: 2025-003 Repeat Finding: No Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Late Submission of the Data Collection Form Major Programs: Aging Cluster Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Reporting Condition: The auditee did not submit the required Data Collection Form (SF-SAC) and reporting package to the Federal Audit Clearinghouse within the timeframe required by Uniform Guidance. The filing was delayed because the annual audit could not be completed as scheduled due to unresolved accounts receivable balances that required additional reconciliation and audit procedures before the financial statements could be finalized. Criteria: Pursuant to 2 CFR § 200.512(b), an auditee must submit the Data Collection Form and reporting package to the Federal Audit Clearinghouse no later than the earlier of: Thirty (30) calendar days after receipt of the auditor's reports, or Nine (9) months after the end of the audit period. In addition, management is responsible for maintaining effective internal controls to ensure the timely preparation of accurate financial records and compliance with federal reporting requirements. Cause: The auditee did not maintain adequate controls over the reconciliation and monitoring of accounts receivable balances throughout the fiscal year. As a result, significant accounts receivable discrepancies remained unresolved at year-end and required extensive analysis and correction during the audit process. The delay in resolving these matters postponed completion of the financial statement audit and, consequently, the submission of the Data Collection Form and reporting package. Effect: Failure to timely reconcile accounts receivable records contributed to delays in the completion of the audit and resulted in noncompliance with Uniform Guidance reporting requirements. Untimely submission of the Data Collection Form may hinder the timely availability of audit information to federal agencies and pass-through entities and may subject the auditee to increased monitoring or scrutiny by federal oversight agencies. Recommendation: We recommend management strengthen internal controls over financial reporting and federal compliance by:  Implementing formal monthly reconciliations of accounts receivable balances and subsidiary ledgers to the general ledger.  Establishing supervisory review procedures to ensure reconciliations are completed timely and discrepancies are investigated promptly.  Developing a year-end closing schedule that includes deadlines for resolving significant accounting issues before the audit begins.  Maintaining a compliance calendar to monitor Single Audit milestones and federal reporting deadlines.  Periodically reviewing the status of audit preparation activities to identify and address issues that could delay completion of the audit and subsequent federal filings. View of Responsible Officials: Management agrees with the finding and has developed a written corrective action plan.

Finding Number: 2025-004 Repeat Finding: No Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Inadequate Financial Reporting Expertise Resulting in Incorrect Submission of Required Federal Reports Major Programs: Aging Cluster Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Reporting Condition: The auditee submitted financial reports required by the funding source containing inaccuracies and omissions. During the reporting process, Agency personnel were unable to independently prepare and complete the required reports accurately due to a lack of sufficient knowledge and understanding of the reporting requirements. As a result, the funding source provided significant assistance and information necessary for the auditee to complete and submit the reports correctly. Criteria: Uniform Guidance requires recipients of federal awards to establish and maintain effective internal controls that provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective controls include ensuring that personnel responsible for compliance reporting possess the skills, knowledge, and expertise necessary to prepare accurate and complete reports and that reports are subject to adequate review before submission. Cause: Management did not ensure that personnel assigned responsibility for reporting had the necessary training, experience, or technical knowledge to understand and apply the funding source's reporting requirements. In addition, management did not implement sufficient supervisory review procedures to detect reporting errors prior to submission. Effect: As a result of the control deficiency, required reports were initially inaccurate and could not be completed without substantial assistance from the funding source. Reliance on external parties to prepare or correct required compliance reports increases the risk that reporting errors, omissions, or noncompliance may not be identified timely. Inaccurate reporting could adversely affect funding decisions, monitoring activities, and the funding source's ability to evaluate program performance and financial accountability. Recommendation: We recommend management strengthen internal controls over federal reporting by:  Ensuring personnel responsible for compliance reporting receive adequate training regarding program requirements and reporting instructions.  Evaluating whether existing staffing possesses the appropriate skills, knowledge, and expertise to prepare required federal reports.  Developing written procedures and reporting checklists for all required submissions.  Implementing a formal supervisory review process to verify the accuracy, completeness, and consistency of reports before submission.  Maintaining documentation supporting reported amounts and reported performance information.  Providing periodic refresher training when reporting requirements change. View of Responsible Officials: Management agrees with the finding and has developed a written corrective action plan.